Voluntary Liquidation of a Company by the Members

A company can be dissolved by liquidation and there are three
categories of liquidation:

A voluntary liquidation by the members after the
making of a statutory declaration of solvency

A voluntary liquidation by the members which is
ratified by the company creditors

A court ordered liquidation

In a voluntary liquidation the appointed liquidator must
file accounts with the Companies Registration Office and the company is then
dissolved 3 months after that.

Every invoice, letter, email or order for goods thereafter
should indicate that the company is in liquidation.

Members voluntary winding up

The two main requirements for a members voluntary winding up
include:

A statutory declaration of solvency

A special resolution must be submitted to the
CRO (Companies Registration Office)

The Declaration of Solvency is made on form E1 which
involves the directors declaring that they have enquired into the affairs of
the company and are of the opinion that the company will be able to pay its
debts in full within a period of 12 months from the commencement of the winding
up.

Within 1 month/30 days of making this declaration of
solvency the members must pass a special resolution to wind up and appoint a
liquidator (form G1).

The resolution to wind up must be advertised in Iris
Oifigiúil within 14 days of passing the resolution.

Forms E1, G1, and a Notice of Appointment of Liquidator
(Form E2) must be filed with the Companies Registration Office.

Procedure for commencement of a members’ voluntary winding up

Section
579 of the Companies act 2014 sets out the procedure for the commencement of
a members’ voluntary winding up in Summary Approval Procedure, which requires a
special resolution of the directors.

Alternatively, an ordinary resolution of the directors will
be sufficient if the procedure under section 580 of the Companies act 2014 is
adopted in respect of companies of fixed duration or a company which is to
dissolve on the happening of a fixed event:

a) on the expiry of
the period, if any, that is fixed for the duration of a company by its
constitution; or

(b) should such
happen, when the event occurs on the occurrence of which a company’s
constitution provides that the company is to be dissolved;

a members’ voluntary
winding up of the company may, alternatively to the employment of the Summary
Approval Procedure for that purpose, be commenced in accordance with section
580.

In summary, three forms must be filed with the CRO
(Companies Registration Office): E1, E2, and G1 and an advertisement must be
placed in the Iris Oifigiúil publication.

A form E3 may be required if the liquidation is not completed
within 12 months; E3 is a form in which the Liquidator gives an account of his
acts and dealings.

3 months after the date of registration of the final
accounts (forms E6 and E5), the company is deemed to be dissolved.

Qualifications for appointment as liquidator

The qualifications for appointment as a liquidator are set
out in section
633 Companies act 2014 and there are 5 categories of individual who qualify.

Eligible individuals include practicing solicitors, members
of prescribed accountancy bodies, a person with practical experience of winding
ups and knowledge of the law, members of a professional body recognised by the
Supervisory Authority, and a person qualified under the laws of another EEA
state.

The liquidator will need professional indemnity cover and
certain persons are disqualified from acting as liquidator-for example, the
company auditor, or an officer or employee of the company.

Section 583 of the Act provides that the company can appoint
the liquidator at a general meeting. A general meeting can also remove or
replace the liquidator.

Declaration of Solvency

The declaration of solvency form (E1) must be completed
correctly and it is vitally important to check it carefully before submitting
it to the CRO; if not directions from the High Court will be required.

The Independent Person’s report must contain certain
prescribed information such as the scope of the work performed by the statutory
auditor and the opinion of the statutory auditor that the declaration of
solvency is not unreasonable.

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Cookie settingsACCEPT

Privacy & Cookies Policy

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience.

Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.

Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.